Poor morale among employees is contributing to delayed model releases from Google's DeepMind AI lab, according to conversations with half a dozen current and former Google DeepMind employees.Why it matters: As the company's cash flow just turned negative, investors and competitors are questioning Google's standing in the AI race.State of play: Google's Gemini 3.5 Pro, its most powerful model in the works, is months behind, per Bloomberg, but the company did just release a series of smaller, more efficient models, garnering mixed reactions. Top executives from competing AI labs were quick to shade the releases, with Meta's Alexandr Wang saying "Gemini who?" on X, and others asking top Google leadership when more powerful models will be ready. Despite beating estimates in its latest earnings on Wednesday, the company's free cash flow turned negative, in large part due to its AI investments: It's on track to spend $190 billion this year.Yes, but: Google showed 82% growth in cloud revenue, but search revenue came in slightly below Wall Street's expectations, exacerbating concern about the company's AI capex paying off, Mandeep Singh, Bloomberg Intelligence analyst, said on Bloomberg TV.Zoom out: The perceived dip in AI capabilities comes amid the ongoing AI talent wars, which have hit Google the hardest.Several top researchers have departed for competing AI labs.Those departures include influential researcher and Gemini co-lead Noam Shazeer, who's now at OpenAI, and Nobel Prize in Chemistry winner John Jumper, who left for Anthropic.
Multiple employees have publicly said they resigned over Google's April deal with the Pentagon that allows the military to use its technology. Sources who spoke to Axios anonymously said the deal comes up often during exit interviews. The sources spoke on the condition of anonymity due to fear of retaliation.What they're saying: "We're behind," one employee told Axios, referring to the company's model capabilities compared with competitors.
Some sources tied the recent dip in morale to the company's military deal, but others said the burnout is about feeling one step behind competitors.Google didn't prioritize agentic coding as it raced to defend search from ChatGPT, a DeepMind employee who worked on model training said.Gemini's models do not crack the top 10 most used in the LLM leaderboard tracked by OpenRouter.Zoom in: It's a "c…
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